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Roski talkingto Mathewson?

Dec 26, 2000 10:57 AM

A SUITOR FOUND? "Only a few insiders know
anything about it," said an in-the-knowster, "but I have the
scoop. It has to do with Los Angeles businessman Ed Roski Jr. and International
Game Technology (IGT) Chairman Chuck Mathewson. They’ve been huddling to
see if there’s a fit to close the $300 million-plus purchase of the Las Vegas
Hilton."

Knowster: "It’s hush, hush, but it’s up on
my radar screen. Believe me, they are talking to see if a deal can be struck. Roski has
been beating the pavement looking for investors to finalize the sale by Park Place
Entertainment (PPE).

Heard broke the story of Roski buying the Hilton in its July 4
issue. A week later when everyone else caught up with the story, it was widely reported
that the sale price was $365 million. Heard quickly came back and shot a hole in
the story and said the price was slightly over $300 million.

"Ever since, rumors have been flying that Roski was not
getting the job done in raising the money. They said the deal was very iffy. I didn’t
believe it for a minute. First of all, Roski didn’t become big and rich not knowing
what he was doing. And secondly, I think he would be too smart to fork over $20 million to
Park Place if the deal isn’t completed in February.

"I can name at least six eligible suitors he has been courting.
Mathewson is a new one. And, I am told, has the most promise. The skinny I’m getting
is that Mathewson would be coming in on his own with Roski. It would have nothing to do
with IGT, the giant slot maker.

"That makes sense to me. At 71, Mathewson still has a twinkle in
his eye for deal making. He recently announced that his long-time sidekick, Tom Baker,
57, is moving up as president and CEO of the company and Mathewson would remain on as
chairman of the board.

"There was once a taboo about casino suppliers getting into the
casino business as did Bally Gaming when it bought Bally’s casino.

"Chuck seems to be having less to do with the company and could
possibly make the deal with Roski and the Las Vegas Hilton his last hurrah."

Still more knowster: "I don’t know how the two
parties (Roski and Mathewson) got together. But, I intend to find out. Don’t forget,
Mathewson got his education early on Wall Street. He could very well be the perfect
ingredient Roski needs to bake his cake. At 61, Roski wants to transform the Las Vegas
Hilton into a middle-market slot house with upscale restaurants and entertainment.

"Slot house? I wonder what Chuck knows about slot houses?"

Efforts to reach Roski and Mathewson proved fruitless over the holiday
weekend.

Stay tuned.

TOUGH GAME TO FADE!Harrah’s Entertainment’s
(HET) New Orleans casino won $19.6 million in November.

"Forget that it was the lowest revenue since April," said a pipe.
"That’s bad enough, but when you discover that the ill-fated casino handed over
$8.2 million of that win to the state in taxes, it shows that the music in Jazz City is
getting too loud for clear thinking.

More pipe: "The company executives were in New York
City the week before Christmas negotiating with creditors and bondholders. It’s a
last-ditch effort to secure an agreement to financially reconstruct before it files for
bankruptcy in January.

"What can anyone expect from a casino that has been losing about
$8 million a month since it opened October 1999?"

From another source in the bayou: "Expect Gov. Mike Foster
to call a special legislative session by early February. Don’t lose site of the fact
that the casino’s main money is coming from Harrah’s Entertainment. They say
they will cut off the guaranteed tax liability for the casino on March 31, 2001."

That’s the final date of its obligation.

WHO WILL BUY? Now that International Game Technology (IGT)
told of its acquisition of Silicon Gaming (SGIC) for $45 million (81/4 to 9Â½ cents
per share) in cash, what happens to Silicon’s online gaming division ””
WagerWorks?

"You can bet MGM MIRAGE (MGG) is standing in line,"
said a rosebud. "I hear Silicon will sell all but 4.9% of WagerWorks.
How much will the online gaming division bring? Good question. If it gets more than something,
look for the sale price to increase."

Farther south in Delaware, slot revenue at three Delaware racetracks
jumped over 9% to $36.3 million in the month of November. Leading the pack were Delaware
Park ($17.9 million, up 8.9%) and Dover Downs ($11.7 million). Both Delaware
and Dover have the 2000-slot maximum in place.

HILTON ON THE MOVE! "The announcement that Hilton Group
PLC is streamlining operations came as no surprise to me," said a reliable
source.

"It will sell its Ladbroke casinos ($375 million) to Gala
Group. Also, 27 British casinos, one in Gibraltar and one on the Isle of Man.

Gala Group is the owner of bingo halls of the same name in Great
Britain.

In the USA, the Meadows racetrack in Pennsylvania, as well as
four off-track betting theaters are being sold. The latter are being purchased by Magna
Entertainment Corp. for $53 million.

"The way I see it," the source added, "it’s all
about Hilton overseas merging with Hilton Hotels!"

Then, what? Stay tuned.

MORE INDIAN GAMING IN CALIFORNIA? "Yes, yes,"
said a pipe.

Oakland Mayor Jerry Brown is talking with Muwekma Ohlone
Indians to build a full-scale casino on an old army base nearby.

At the same time, Indian gaming proponents are on the move to open
casinos in urban areas of California.

"It’s going to get dicey for Gov. Gary Davis. He gave
his blessings to state Indian tribes to operate Nevada-style casinos in California, but on
their own land," said a pipe.

THE PRICE AIN’T RIGHT! So don’t be surprised when you
learn that Colony Capital is having trouble finding the right price for bonding
financing to buy the venerable Resorts Casino, Atlantic City’s first casino.

Colony’s Harvey’s Casino in Lake Tahoe, Nev.,
postponed its purchase of Pinnacle Entertainment Inc. (PNK) recently when it said
the price of money was too high.

On the Pinnacle page, expect to see the company going back on the
blocks now that Colony has kissed them good-bye.